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Metro AG agreed to sell 19 Vietnamese stores to a Thai distributor as the German retailer withdraws from the country, part of its strategy to sharpen its focus and invest in improving performance elsewhere.

Metro is selling its wholesale stores in Vietnam to Thailand’s Berli Jucker PCL (BJC) for an enterprise value of 655 million euros ($876 million). Metro Chief Executive Officer Olaf Koch said the deal will “further strengthen our balance sheet” and allow the company to invest in growth.

Koch is trying to overcome sluggish sales at the owner of Galeria Kaufhof department stores and the Media Markt and Saturn electronics chains. The Dusseldorf-based company is exploring other moves to unlock value from its retail holdings, including a possible spinoff of the Media-Saturn chain and an initial public offering of its Russian stores, a plan that is currently on hold.

“The transaction is a reminder of some of the significant value ‘hidden’ in the business, notably in property assets,” Andy Gwynn, an analyst at Exane BNP Paribas, said in a note to clients today. The sale nets Metro about 1.25 times the Vietnam unit’s 516 million euros in sales, he said. “It remains to be seen if Metro can repeat the sales multiple on a wider scale -- Vietnam was probably one of Metro’s least-developed markets.”

Shares of Metro rose 0.7 percent to 25.26 euros at 4 p.m. in Frankfurt. Metro has lost 28 percent this year.

Metro gain

For Metro, the sale of the Cash & Carry business to Berli Jucker, a consumer-goods distributor, will add in the “mid three-digit million-euro” range to earnings before interest and taxes this year. Berli Jucker, which also makes its own candy, cookies and tissues, gets access to the Vietnamese grocery market. The sale is expected to close in the first half of next year.

Berli Jucker, controlled by Thai billionaire Charoen Sirivadhanabhakdi, said in a separate statement that the acquisition price includes about 47 million euros of rent that have been pre-paid for 20 to 37 years. Metro entered Vietnam in 2002 and employs about 3,600 people there.